In Yemen, 2018 looks like it will be another grim year

December brought some of the biggest shifts in Yemen’s civil war since a Saudi-led coalition entered the conflict in March 2015. On Dec. 4, former president Ali Abdullah Saleh was killed by members of the Zaydi Shiite Houthi movement with whom he had been allied until just a couple of days before. His death has led to newfound optimism in Riyadh and elsewhere that the Houthis can be defeated militarily in 2018.

Yet Saleh’s death has produced fewer substantive changes in the balance of power than might have been anticipated. And the incentives for many actors involved in the war to sustain rather than end it remain high.

For the past year, Chatham House has been mapping key players on the ground in Yemen: military officers, militia leaders and politicians, along with a dwindling supply of state and nonstate governance actors. We have also been building a picture of the political geography and economy of the conflict.

The aim has been to analyze how the different actors fit into what is less a “war economy” than what we call Yemen’s “chaos state,” and assess their incentives and disincentives for participating in a peace process. In December, we published our research, in the form of a long report and a freely available online interactive map.

The situation on the ground is far more complex than Houthis vs. Hadi.

Yemen has been divided into multiple zones of territorial control and influence that go far beyond big-picture narratives of an Iran-backed Houthi-Saleh alliance (now just the Houthis) against the rest of Yemen, united under President Abd Rabbu Mansour Hadi and backed by the Saudi-led coalition. U.N. negotiation efforts have also been structured around this false dichotomy.

Local groups have done the bulk of fighting against the Houthis, provided most governance outside Houthi areas and control most territory on the ground. In contrast, the Hadi government has a very light footprint. Hadi cannot visit many areas under his nominal control, and his purported allies do not necessarily get along. In many cases, they have sharply divergent agendas.

For example, UAE-backed forces in Hadramawt, in eastern Yemen, have not participated in the war with the Houthis. They have mainly focused on fighting the local al-Qaeda franchise and consolidating their control over Mukalla port and its environs. Meanwhile, military units and tribal militias affiliated with former president Saleh and Yemen’s main Sunni Islamist party, Islah — whose members Hadrami forces have been arresting and detaining in large numbers — control the other side of the wadi, or valley, that bisects Hadramawt. Many locals predict a future power struggle.

In Taiz, an odd-couple mix of UAE-backed Salafists and Nasserists, regularly clash with Saudi-funded Islahi militias. Tensions between President Hadi and the UAE — which sparked fighting around Aden airport in February — have set back the war effort in Taiz and along Yemen’s west coast. While much has been made of a UAE-Islah rapprochement, in reality, anti-Houthi forces are not a coherent unit. The seeds of future conflict are being sown across the country.

Many groups ostensibly fighting the Houthis have profited from the thriving war economy.

The Saudis have repeatedly justified their blockade of the western port of Hodeidah by arguing it is a major entry point for smuggled materiel. But fuel, food, medicine, electronics and arms enter ports across Yemen’s southern coast and over land borders with Saudi Arabia and Oman. Overland trade is worth tens, if not hundreds, of millions of dollars a month for everyone from the guys with guns at checkpoints to the top leadership on all sides. Weapons have become so widely available that the price of AK-47s and ammunition has gone down since the war began. Meanwhile, some groups are benefiting from the sale of oil and gas both to local and international markets.

With Saleh out of the picture, the Houthis now have a monopoly over trade in the territory they control. For the first time since their first 2004 uprising, they finally have a relatively sustainable revenue base and their military leaders are getting rich. Diplomats have yet to wrap their head around the implications of the war economy for mediation efforts. The cost of winning a war for Yemen’s northern highlands would be phenomenally high in both blood and treasure. The alternative is maintaining a profitable status quo.

The Houthis were stronger than many had assumed and no longer have to worry about internal threats.

In 2017, insiders in Sanaa had told us the Houthis held an increasingly dominant position on the front lines of the war and a growing stranglehold over security elsewhere. The speed with which the Houthis dispatched Saleh, and their ability to maintain the front lines with few defections, supports this analysis. The Houthis emerged from the schism light a few soldiers, but they retain full control of an estimated 60 to 70 percent of Yemen’s prewar military arsenal and no longer have to contend with an internal rival.

The Houthis will possibly lose some territory in the coming weeks and months, especially if Saudi- and UAE-backed groups coordinate more closely. Already, Houthi militias have been pushed out of Bayhan district in Shabwa governorate and have lost ground to UAE-backed forces in Hodeidah. They have also lost the support of most ordinary Yemenis thanks to the brutal police state they are building that imprisons, tortures and kills its rivals. But a battle for Sanaa or Hodeidah would possibly be bloody and destructive, pushing Yemen’s humanitarian crisis — already the worst in the world — into a new, even more catastrophic, phase.

The Saudi-led coalition reportedly believes a military victory — which they would cast as a symbolic win against Iran — can be achieved in 2018, but what that “victory” might look like remains an open question. The best Riyadh can hope for is destructive battles followed by years of messy insurgency and counterinsurgency in Yemen’s northern highlands.

With U.N. mediation efforts stalled since 2016 and the peace process in need of major restructuring following Saleh’s death, it is hard to be optimistic for Yemen. Barring a major diplomatic breakthrough, another grim year possibly waits in store.